LIFESTYLE NEWS - It can be difficult for young people earning their first salaries to afford medical cover. 

In fact, it can be difficult even for those who are a little older to include medical cover in to their budget, but the longer one waits to join a medical scheme, the more expensive it becomes.

Some workplaces may have the option to belong to the company’s medical scheme, while some young people are lucky enough to remain under their parents’ medical scheme until their mid-twenties, yet not everyone has these options. 

“The reality is that medical cover is pricey, but it is better to join as early as possible, and better to have cover than not,” says John Cranke, National Manager of Employee Benefits at PSG Wealth.

Medical schemes have to cover both healthy and unhealthy members. 

“Generally younger members claim less than older members, and in this way contribute to the schemes reserves while they are young and healthy in order to access those reserves later,” Cranke says. 

“Therefore people choosing not to join a medical scheme while they are young and healthy are penalised for joining the scheme later in life by way of increased contributions, also known as late joiner penalties”.

In South Africa, the cost of private healthcare is currently the subject of an inquiry by the Competition Commission to establish what is driving costs. 

It certainly isn’t cheap to belong to any medical scheme, even though there are different options for different budgets. 

“Suffice to say, you may wonder why medical cover is generally so expensive, and one of the reasons is because all schemes must cover Prescribed Minimum Benefits,” he adds. 

Known as PMBs, these include covering in full in excess of 270 diagnoses requiring hospitalisation. 

“The Council of Medical Schemes estimated these exceed R680 per beneficiary per month, and this estimation was made back in 2016.”

So somewhat ironically although the PMBs offer beneficiaries peace of mind, this comes at a price that takes medical scheme cover out of the reach of many South Africans. 

An additional problem is that medical scheme contributions increase at a pace well in excess of inflation – averaging somewhere between three and five percent higher than CPI. 

“This is because of many factors but more recently utilisation has been the primary driver – and if members are claiming more, schemes can react by doing one of two things; either decreasing benefits or passing on higher contribution increases,” Cranke says.

Consider as well that paying for hospitalisation out of your own pocket without any medical cover is incredibly expensive. 

“Be cautious of simply opting for health insurance instead of joining a medical scheme, as cover can end up being completely insufficient if you end up in hospital,” he adds.

The best thing to do is shop around and look for the most appropriate cover for your lifestyle (including meeting your needs and budget) as there are a range of options from traditional schemes to new-generation schemes, to a hybrid of both, as well as add on products that can cover shortfalls such as gap cover.

Medical schemes are not permitted to differentiate contributions on anything other than family size (i.e. beneficiaries you want covered), or income. 

“Often the network options on the schemes have income-related contributions, so this is a good place to start when investigating affordable options best suited to you,” he concludes.

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